Shri Krishna Education Trust, RAJKOT-GUJARAT V. The Commissioner of Income Tax, Rajkot-III, RAJKOT-GUJARAT

ITA 67/RJT/2013

• Counselvise Citation: 6724914 RSA 2013
• Duration Of Justice: 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-04-2013
• Assessment Year: misc
• Appeal Filed On: 20-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N R SONI
• Assessee Lawyers: DR ADHIA
• Keywords: Charitable institution; Non compliance
• Section: 80G; 12AA

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT . . , . . , BEFORE SHRI T K SHARMA, JM AND SHRI D K SRIVASTAVA, AM ITA NO. 67/RJT /2013 SHRI KRISHNA EDUCATION & CHARITABLE TRUST V. COMMISSIONER OF INCOME - TAX AT. MANDOR , RAJKOT - III TAL. VERAVAL, DIST. JUNAGADH. DATE OF HEARING : 11 - 0 4 - 201 3 DATE OF PRONOUNCEMENT : 15 - 0 4 - 201 3 ASSESSEE BY : SHRI D R ADHIA, AR REVENUE BY : SHRI N R SONI, DR / ORDER THE APPEAL FILED BY THE ASSESSEE - TRUST IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT , RAJKOT - III ON 31 .0 1.2013, ON THE FOLLOWING GROUNDS: - 1. THE LD. COMMISSIONER OF INCOME - TAX HAS ERRED IN LAW AND FACTS IN REFUSING TO GRANT APPROVAL U/ S 80G(5) OF THE INCOME - TAX ACT, 1961. THE TRUST DESERVES RECOGNITION U/S 80G(5). 2. THE LD. C.I.T. HAS ERRED IN COMING TO THE CONCLUSION THAT APPELLANT IS NOT FULFILLING THE CONDITION FOR APPROVAL OF THE PROVISIONS OF SECTION 80G(5) OF THE IT ACT. THE TRU ST DESERVES RECOGNITION U/S 80G(5). 3. THE LD. C.I.T. HAS ERRED IN COMING TO THE CONCLUSION BASED ON IRRELEVANT ASPECT THAT THE TRUST HAS NOT CARRIED OUT ACTIVITIES WHICH ENTITLE IT S FOR RECOGNITION U/S 80G(5) AS PER OBJECT OF THE TRUST. THE TRUST DESERV ES RECOGNITION U/S 80G(5). 4. THE LD. C.I.T. HAS ERRED IN NOT CONSIDERING THE REAL ASPECT OF THE PROVI SI ONS OF SECTION 80G(5) OF THE IT ACT, 1961. THE TRUST DESERVES RECOGNITION U/S 80G(5) . 5. TAKING INTO CONSIDERING THE LEGAL, FACTUAL AND STATUTORY ASP ECT OF THE OBJECT OF THE TRUST, THE LD. CIT OUGHT TO HAVE GRANTED RECOGNITION U/S 80G(5) AS APPLIED FOR. IT IS THEREFORE PRAYED THAT THE ORDER PASSED BY THE LD. C.I.T. 2 ITA 67/RJT/2013 REFUSING TO GRANT RECOGNITION U/S 80G(5) MAY KINDLY BE CANCELLED AND HE MAY BE DIRECTED TO GRANT RECOGNITION U/S 80G(5) TO THE APPELLANT AS APPLIED FOR. 6. WITHOUT PREJUDICE, THE LD. CIT HAS ERRED IN NOT GRANTING ADEQUATE AND REASONABLE OPPORTUNITY. THE ORDER PASSED BY THE LD. CIT NEEDS CANCELLATION/RESTORATION TO CONSIDER AFRESH THAT THE T RUST DESERVES RECOGNITION U/S 80G(5). 7. WITHOUT PREJUDICE, THE ORDER PASSED U/S 80G(5) IS BAD IN LAW DESERVES CANCELLATION. 8. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND AND/OR SUBSTITUTE ANY OR ALL GROUNDS OF APPEAL BEFORE THE ACTUAL HEARING TAKES PLACE. 2. THE ASSESSEE - TRUST APPLIED FOR APPROVAL U/S 80G(5) OF THE INCOME - TAX ACT ON 20.07.2012 BEFORE THE COMMISSIONER OF INCOME - TAX. THE SAID APPLICATION WAS ACCOMPANIED BY THE COPY OF AUDIT REPORTS FOR FY 2009 - 10, 2010 - 11 & 2011 - 12. THE ASSESSEE - TRU ST IS ALSO REGISTERED UNDER THE BPT ACT AND ALSO U/S 12AA OF THE INCOME - TAX ACT. THE LD COMMISSIONER OF INCOME - TAX, HOWEVER, REFUSED TO GRANT THE APPROVAL U/S 80G(5) OF THE INCOME - TAX ACT FOR REASONS STATED IN P ARAS 5 AND 6 OF HIS ORDER DATED 31.01.2013, W HICH READ AS UNDER: - 5. NON COMPLIANCE TO THE NOTICE OF HEARING LEADS TO A CONCLUSION THAT THE ASSESSEE IS NON - COOPERATIVE AND NOT INTERESTED IN DISPOSING ITS APPLICATION FOR RECOGNITION U/S 80G(5) OF THE ACT. HENCE THE APPLICATION OF THE ASSESSEE TRUST IS DECIDED ACCORDINGLY ON THE BASIS OF THE DETAILS AND DOCUMENTS AVAILABLE ON RECORDS HEREUNDER: 6. THE ASSESSEE TRUST IS REGISTERED U/S 12AA OF THE ACT ON 29.12.2005. ON VERIFICATION OF THE TRUST DEED ATTACHED WITH THE APPLICATION IT IS OBSERVED THAT THE TRUST IS CREATED BY MAJORITY OF THOSE PERSONS BELONGING TO THE SAME FAMILY. FURTHER MORE THE ASSESSEE TRUST HAS NOT CARRIED ANY OF THE CHARITABLE ACTIVITIES MENTIONED IN THE TRUST DEED EXCEPT CONSTRUCTION OF DAM PROJECTS OF THE STATE GOVT. SINCE ITS INCEP TION. THE SAID ACTIVITY OF CONSTRUCTION OF CHECK DAMS DOES NOT DEMONSTRATE THE INTENTION OF THE ASSESSEE TRUST FOR CARRYING 3 ITA 67/RJT/2013 OUT THE CHARITABLE ACTIVITIES AS PER THE OBJECTS OF THE TRUST. THE SAID ACTIVITY IS RATHER ACTIVITY IN COMMERCIAL NATURE INSTEAD OF CHARITABLE NATURE. THIS LEADS TO A CLEAR CONCLUSION THAT THE TRUST HAS NOT AT ALL MADE CHARITABLE ACTIVITIES AS PER THE OBJECTS OF THE TRUST. THIS CONCLUSION IS FURTHER STRENGTHENED AS THERE IS NO COMPLIANCE TO THE NOTICE ISSUED BY THIS OFFICE VIDE LETTER DT. 16.01.2013. IN VIEW OF THE ABOVE FACTS THE TRUST IS NOT LIABLE FOR RENEWAL OF RECOGNITION U/S 80G OF THE ACT. 3. IN SUPPORT OF APPEAL, THE LD AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE - TRUST SUBMITTED THAT THE COMMISSIONER OF INCOME - TAX HIMSELF HAS R EGISTERED THE ASSESSEE - TRUST U/S 12AA OF THE INCOME - TAX ACT ON 29.05.2012 (PARA 2 OF THE IMPUGNED ORDER). HE SUBMITTED THAT T HE LD. CIT(A), HOWEVER, REFUSED TO GRAN T APPROVAL ON 31.01.2013 U/S 80G(5) WHICH WAS JUST 8 MONTHS AFTER THE REGISTRATION GRANTED B Y HIM U/S 12AA OF THE ACT. HE FURTHER INVITED OUR ATTENTION TO P ARA 6 OF THE IMPUGNED ORDER AND SUBMITTED THAT THE LD COMMISSIONER OF INCOME - TAX PROCEEDED TO EXAMIN E THE CASE AS IF IT WAS A CASE OF RENEWAL OF APPROVAL U/S 80G WHEREAS THE ASSESSEE WAS SEEKI NG FRESH APPROVAL FOR THE FIRST TIME U/S 80G. HE, HOWEVER, ASSURED THAT HE WOULD BE ABLE TO PLACE ALL THE FACTS BEFORE THE COMMISSIONER IN CASE HE WAS GIVEN AN OPPORTUNITY TO DO SO. 4. IN REPLY, THE LD DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER PASS ED BY THE COMMISSIONER OF INCOME - TAX. 5. WE HAVE HEARD BOTH THE PARTIES. THERE ARE SEVERAL FACTUAL INACCURACIES IN THE IMPUGNED ORDER PASSED BY THE COMMISSIONER. IN PARA 2 OF THE IMPUGNED ORDER, IT IS STATED THAT THE ASSESSEE TRUST WAS REGISTERED U/S 12AA OF THE INCOME - TAX ACT ON 29.05.2012 . IN PARA 6 OF THE IMPUGNED ORDER, IT IS STATED THAT THE ASSESSEE - TRUST WAS REGISTERED U/S 12AA ON 29.12.2005 . THERE IS APPARENT CONTRADICTION BETWEEN WHAT IS STATED WITH REGARD TO THE DATE OF REGISTRATION IN PARA 2 AND PARA 6 OF THE IMPUGNED ORDER. PERUSAL OF PARA 6 OF THE IMPUGNED ORDER FURTHER SHOWS THAT THE LD COMMISSIONER OF INCOME - TAX HAS HELD THAT THE ASSESSEE - TRUST IS NOT LIABLE FOR RENEWAL OF RECOGNITION U/S 80G OF THE ACT WHEREAS THE APPLICATION SUBMITTED BY THE ASSESSEE WAS FOR INITIAL RECOGNITION AND NOT RENEWAL OF RECOGNITION. BESIDES, THE IMPUGNED ORDER DOES NOT SHOW AS TO WHICH OF THE CONDITIONS LAID DOWN U/S 80G(5) 4 ITA 67/RJT/2013 FOR APPROVAL ARE NOT BEING SATISFIED. PERUSAL OF PARA 4 OF THE IMPUGNED ORDER FURTHER S HOWS THAT THE ASSESSEE HAS ALSO NOT ENTERED APPEARANCE BEFORE THE LD COMMISSIONER. TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE SUBMISSIONS MADE BY THE PARTIES, WE CONSIDER IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD COMMISSIONER AND RESTORE THE MATTER TO HIS FILE FOR A FRESH DECISION IN CONFORMITY WITH LAW AFTER GIVING REASONABLE OPPORTUNIT Y OF HEARING TO THE ASSESSEE . WE ORDER ACCORDINGLY. A PPEAL FILED BY THE ASSESSEE - TRUST IS TREATED AS ALLOWED FOR STATISTIC AL PURPOSES . 15 .04 . 2013 ORDER PRONOUNCED ON 15 .0 4. 201 3 SD/ - SD/ - ( . . / T. K. SHARMA) ( . . / D. K. SRIVASTAVA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER RAJKOT: 15 .04.2013 BT / COPY OF ORDER FORWARDED TO: - 1. / APPELLANT - . SHRI KRISHNA EDUCATION & CHARITABLE TRUST, VERAVAL, JUNAGADH 2. / RESPONDENT - CIT - III, RAJKOT 3. / CONCERNED CIT 4 . , , / DR, ITAT, RAJKOT 5 . / GUARD FILE. / BY ORDER , TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT